bsp_tool CAN work with Steam if you extract the BSP files from the Steam cache first (you can use PMTools for that, or install a program called GCFScape).
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Thanks for the info Pierre-Marie will gave it a try with what you said. Tried a non-steam install but it still could not find the half life dir. No matter how I told it were it was.
Will tried the cfg scape but it does nothing for me. what I am trying to do is create map overviews for several custom maps and I need to be able to slice the bsp files and the bsp_tool has a slicer with it but it just will not find the half-life dir when it trys to run.